Tuesday, January 17, 2017

8 years on . . .

That’s how old the blog is. And one of the first postings had the title “In survival mode?” “Today foreign chambers of commerce are talking to us, encouraging us to gear up and realize the potentials of the country. That’s the good news. They don’t view us like some exotic Caribbean or South Pacific islands that have been stereo-typed as simply a holiday resort for tired Western tourists.

“What potentials are these foreign chambers seeing in the Philippines?

“The writer went down the list of countries alphabetically, excluded those with very small or very large population and picked 8 familiar ones at random: Argentina, Malaysia, Peru, Philippines, Romania, Thailand, Turkey and Vietnam.

“With the exception of Vietnam (whose population size is close to ours), we have the lowest GDP per capita in PPP terms or purchasing power parity. Vietnam has just about half of our GDP which is not surprising being a more recent entrant to the free-market system (and, of course, the Vietnam War). Yet, foreign investors are betting on them and have invested more in Vietnam than the Philippines; and they have more than two-and-a-half times our investment rate. In short, given the multiplier effect that economists tell us, Vietnam is poised to generate greater economic activity than we do. They already export more than we do.

“And with the exception of Peru, we have the highest poverty rate among these 8 countries. Peru has a very interesting profile compared to the Philippines . . . It is more domestic-focused than we are . . . bigger poverty problem . . . and a worse Gini index or income distribution . . .”

Sadly, after 8 years, where we are is not much to crow about. And what is the national conversation about? The drug war. Federalism. The Marcos resurrection and/or martial law. Fast-tracking key infrastructure projects. Five-six.

Let’s continue with the referenced posting: “Yet we talk with growing concern about our country and our alarming poverty rate. We realize that the positives in our economy merely allow us to eke out or survive amid the challenges we and the rest of the world are facing. And the picture becomes stark when we measure ourselves against other countries, not just the Asian tigers . . . where we stand against 7 other countries.”

Are we stuck with same old, same old yet expect a different outcome? Parochial. Insular. Hierarchical. Paternalistic. Political patronage and dynasties. Oligarchic. Culture of impunity. How do we turn them on their heads? Try: Open. Egalitarian. Free market. Rule of law. Not if we keep running away from the challenge of transparency, which undergirds our instincts and why community and the common good is alien to us?

And what’s driving the national conversation? Like prostitution and usury, addiction has been around even during the time of Christ – who embraced not cast the sinners. But it’s easy to judge like the Pharisees and the scribes did, supposedly smart and learned in the law? Recall “Lying Ted” who lost to Trump from an earlier posting, and how religion undermines moral progress and unsettles the world? That the Christian culture cannot claim moral superiority, if we need a dose of reality?

Of course, in our drug war, narco-politics is the elephant in the room. Yet that shouldn’t be a surprised given PHL is synonymous not to the rule of law but to a culture of impunity? But we view the challenge as one-dimensional, forgetting EJK adds fuel to the fire [of impunity]? Let’s be honest, how many in the bureaucracy (name an agency, e.g., Customs or branch, e.g., legislators, judges, etc.) ought to be asked to surrender under pain of EJK? And while on the one hand we view EJK as serving justice, on the other rank still has its privileges? Because Juan de la Cruz values hierarchy but not transparency?

And we assumed a system like federalism will exempt us from the imperative of transparency? And has federalism ever figured whenever nations benchmarked economies one against another? For instance, Lee and Mahathir told Deng to simply beg for Western money and technology. And it worked! Why do we have to go through all these contortions – and jump through hoops?

Is it because we’re in survival mode that it’s all about reflex action? What about thinking through and thinking ahead – like a person on a mission? If we are to get a sense of the demands of development, like that of an ecosystem? Why? Its absence feeds on “crab mentality” and populism: from OFW remittances to the BPO industry; from GK to CCT; and from the drug war to five-six.

And worse, “he who submits to tyranny loves it,” says Rizal. To do the same thing over and over again and expect a different outcome is insanity, says Einstein.

The one good news is the Du30 administration is ramping up infrastructure development. We had a similar positive sense with the PNoy administration when they introduced PPP. Still, the key is for the administration to focus Juan de la Cruz where it matters. And President Ramos has offered a mantra: Perform. Reform. Transform.

Should it call for holding oligarchy at bay like South Korea did and ensure we get the requisite investment and technology from wherever? That will signal to the world that indeed ours is a level playing field. Which will then encourage the right investors to bet on the JFC's 7 industry winners, for example.

Is an executive order fixing the negative list – that gives oligarchy the playing field to themselves – the way to go? What about good governance in the public sector? The participation of foreign players in public works and services like the MRT and LTO, among others, has cast doubts on our ability to deliver efficiency and performance. Because transparency is not in our value system?

Do we need to put nuns in every nook and cranny of the bureaucracy? And in civil society too, like within the confined walls of oligarchy? How do we step up to the mantra of . . . Perform . . . Reform . . . Transform?

The blog may be 8 years old, but Juan de la Cruz has suffered for decades. Because there is no free lunch. We must value transparency and embrace an open economy, an egalitarian culture, the free enterprise system and the rule of law. Yet it may be too late for this writer’s generation . . .

And what about the millennials? We severely need to appreciate the demands for massive investment – and the competitive advantage of innovation – if we are to be a wealthy economy. Yes, tax reform will upgrade government services but that does not automatically attract the levels of investment we sorely need.

Juan de la Cruz indeed sees the need for elevated government services but must likewise appreciate the imperative for greater investment as well as innovation and competitiveness.

And if parochialism continues to stand in the way, ours shall remain an oligarchic economy – that comes hand in glove with the poverty we wail about. The church and the school, especially, must then do a better job to elevate our capacity – as a people and a nation – for nation building.

Another dose of reality? “As envoy to Korea from May 1999 until my retirement from our foreign service in June 2003, I can well understand the views expressed by Messrs. Kim [Korean President] and Chino [Japanese President of the ADB] . . . I found myself in awkward situations whenever Koreans made comparisons in a discreet way on the economic progress of Korea and the Philippines. One would say: ‘You were very much ahead of us then but I cannot understand what happened.’ Another would wax nostalgic: ‘I studied at the University of the Philippines in the 1960s and have fond memories of my stay in your country but things have changed since then and I wonder why.’ [Why did we fall behind (?), Juanito P. Jarasa, The Manila Times, 13th Jan 2017]

“When a Korean asked me in December 2003 why the Philippines failed to achieve economic progress like Korea, I said without hesitation that we have yet to produce a leader like Park Chung-hee and a businessman with the nationalistic fervor of Chung Ju-yung . . .

“When Gen. Park Chung-hee seized power in Seoul through a military coup in 1961, he made infrastructure-building the centerpiece of his vision of economic development. Once you have the infrastructure, everything else will follow, he said. He also created an Economic Planning Board to provide the central government a direction on how to steer the Korean economy up the road to progress and he made the Heavy and Chemical Industries Promotion plan as the key to developing six strategic industries.

“Park made the industrialization of his impoverished country the prevailing passion of his 18 years in power.”

In other words, a PHL leader must think beyond tyranny and lead and focus Juan de la Cruz on two very fundamental building blocks of nation building – a.k.a. the heart of economic development – as the Asian tigers demonstrated one after the other: (a) infrastructure development and (b) industrialization.

In the meantime, we can only cry when we take a careful look (see above) at what our national conversation is about?

“Why independence, if the slaves of today will be the tyrants of tomorrow? And that they will be such is not to be doubted, for he who submits to tyranny loves it.” [We are ruled by Rizal’s ‘tyrants of tomorrow,’ Editorial, The Manila Times, 29th Dec 2015]

“As a major component for the education and reorientation of our people, mainstream media – their reporters, writers, photographers, columnists and editors – have an obligation to this country . . .” [Era of documented irrelevance: Mainstream media, critics and protesters, Homobono A. Adaza, The Manila Times, 25th Nov 2015]

“National prosperity is created, not inherited. It does not grow out of a country’s natural endowments, its labor pool, its interest rates, or its currency’s value, as classical economics insists . . . A nation’s competitiveness depends on the capacity of its industry to innovate and upgrade.” [The Competitive Advantage of Nations, Michael E. Porter, Harvard Business Review, March–April 1990]

Genesis of this Blog

Now a book

Advocacy

About Me

I started writing to columnists and newspaper editors at the end of a trip to the Philippines over Holy Week in 2008 – to echo the frustrations expressed by friends and relations that were much louder and more intense than prior trips. My first thought was: with so much talents and skills how could the country be the basket case of Asia? Are we simply too nice as a people? Since then I have kept abreast with local news and opinions.
I have been a business consultant (since 2003) focused on Eastern Europe. My principal client in Bulgaria, a consumer-products maker, was chosen by the European Business Awards in 2011 as among Europe’s best from the 15,000 companies vetted for the selection. I started my career in 1968 in human resources in the Philippines. I then joined a Fortune 500 company in 1981, working with its Manila subsidiary for seven years and later moved up to its Asian regional headquarters and finally assumed a global responsibility (in global strategy, organization and business competitiveness) until my retirement. I have likewise done consulting work in the Philippines. I live with my family in Stamford, Connecticut, USA.